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The Impact of Globalization on Small Businesses

Globalization has not only brought the whole world together but it also has an impact on almost all size of businesses. International markets are a great platform of selling and buying of products but they indirectly affect every kind of business as well. A massive change has occurred in the global markets due to so many technological advancements. The basic concept is same but, advancements have not only removed many barriers but they have also made the global business bigger and stronger than ever before.



Globalization is whether an unintended process or a deliberate one. The accidental process happens when the technology, industry, communication and other aspects of business grow automatically. In this scenario, it becomes necessary for local markets to upgrade themselves into the international ones. The more exact process of globalization is the deliberate one. In this context, businesses themselves want to work in global markets and tend to upgrade their businesses.

The two major drivers for businesses to strive for globalization are low manufacturing costs and access to a large number of consumers to sell those low manufacturing cost products. Small businesses are the ones which get affected as well. Chinese Market is the top most international market for businesses looking for low cost products. Small businesses have so many other problems to face that they continuously make efforts to reduce as much production cost as possible. International low cost markets like China are a great source of providing cheaper products to such small businesses.

Impact of Globalization on Small Businesses:

Just like any other bigger operating businesses smaller businesses can also get the maximum benefits from globalization. Unbelievable savings can be maintained by reducing the cost of production at many functional levels of small businesses. For small businesses it is a big deal to have competitive advantage of cost over the competitors. Globalization as stated is a doorway towards low cost products hence it can help a lot small businesses in staying competitive.

Along with establishing a competitive position in the industry it is about the way to growth as well. Growth happens when more opportunities are availed. Getting exposure to a larger community of buyers is what globalization gifts to the small businesses. Usually they have not much place in the local markets to extend their boundaries and number of consumers. By getting an access to international markets, it becomes easy for them to target a large number of potential buyer community.


No matter small businesses are interested in starting their import-export activities they still need to think in the context of global markets. The major advantage small businesses have is their close relationship and contact with their customers. They have usually more interaction with the customers than the bigger businesses. Globalization no doubt reduces that customer interaction advantage. Small businesses have to make a choice whether they want to maintain close relationships and never grow or have grown businesses by start accessing the international customers and markets.

If the small businesses make a decision of promoting themselves in the international and global markets they become more capable of competing on the international level. This will increase the strength and abilities of a small business to work more effectively. Earlier it was only possible for the large businesses to bare all the costs and efforts involved in import export of products. But much technological and other advancement have totally reduced this barrier hence, helping the small businesses to take a step towards global markets.

In another way around when large businesses go global the more it becomes competitive for them which increases the need to reduce the prices. This reduction of prices from large businesses is a very good gesture for consumers and the small businesses as well. The need of small businesses to continuously make efforts in coping up with the large businesses reduces at the point when the prices get lower.

Positive Impacts of Globalization:

Globalization being a vast concept has many impacts and influences. The markets become more efficient which help the economies to grow. In a globalized world when a single economy grows all the other related economies also take a step forward towards growth. The positive impacts can hence be experienced throughout the world. Many organizations and countries develop stable relationships and partnerships between each other due to globalization. Globalization also makes it easy for efficient and productive ideas to become the reality.

Negative Impacts of Globalization:

Small businesses operating in developing countries can also have some negative impacts on their businesses. Globalization makes it easy for the people to migrate towards other countries which means a great loss in a country’s business talent which reduces the choices for small business to hire the experts in their organizations. Globalization is just not about getting more consumers it also brings a huge change which in turn increases the level of challenges and risks to be taken. With a massive increase in the competition it becomes difficult for many small businesses to keep operating and some of them have to fail due to unbearable stress of competing with large globalized organizations.

Globalization is a great blend of positives, negatives and unavoidable changes all at the same time. The best a small business can wish and hope for is that the positive impacts keep on getting over-weighing the negative ones!

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